The Section 232 Presidential Proclamations 9704 and 9705 issued to protect United States’ national security on March 8, 2018 imposed steel and aluminum duties that came into effect on March 23, 2018. An extensive list of steel and aluminum articles became subject to 25% and 10% additional duties respectively.
Additional changes came into effect on May 1, 2018 through Presidential Proclamations 9739 and 9740 issued on April 30, 2018. This included the imposition of an absolute quota on South Korean origin steel and important updates on country exemption statuses.
Further changes are expected to become effective on June 1, 2018, including the potential for additional quotas. Additional Presidential Proclamations are anticipated, likely on May 31, 2018.
Section 232 quick recap
- The Section 232 duties (25% on steel and 10% on aluminum) apply unless there is a country exemption or specific exclusion granted. (Being able to prove the country of origin using mill certificates and manufacturer affidavits is critical.)
- Absolute quotas may apply to certain countries.
- The duties are in addition to anti-dumping and countervailing duties that may apply.
- Special trade programs do not reduce the Section 232 duty.
- However, valid trade program claims otherwise apply with the exception of the General System of Preferences (GSP) and the African Growth and Opportunity Act (AGOA).
- Section 232 duties may not be recovered through duty drawback.
- Any steel or aluminum article subject to the Section 232 duties, that is admitted into U.S. foreign trade zones must be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to any ad valorem rates of duty related to the classification under the applicable HTSUS subheading.
List of steel provisions subject to 25% duty unless exempted or excluded
| The rates of duty set forth in heading 9903.80.01 apply to all imported products of iron or steel classifiable in the following provisions: | ||
|---|---|---|
| Flat-rolled products provided for in headings 7208, 7209, 7210, 7211, 7212, 7225 or 7226; | ||
| Bars and rods provided for in headings 7213, 7214, 7215, 7227, or 7228, angles, shapes and sections of 7216 (except subheadings 7216.61.00, 7216.69.00 or 7216.91.00); wire provided for in headings 7217 or 7229; sheet piling provided for in subheading 7301.10.00; rails provided for in subheading 7302.10; fish-plates and sole plates provided for in subheading 7302.40.00; and other products of iron or steel provided for in subheading 7302.90.00; | ||
| Tubes, pipes and hollow profiles provided for in heading 7304, or 7306; tubes and pipes provided for in heading 7305; | ||
| Ingots, other primary forms and semi-finished products provided for in heading 7206, 7207 or 7224; and | ||
| Products of stainless steel provided for in heading 7218, 7219, 7220, 7221, 7222 or 7223. |
List of aluminum provisions subject to 10% additional duty unless exempted or excluded
| The rates of duty set forth in heading 9903.85.01 apply to all imported products of aluminum classifiable in the following provisions: | ||
|---|---|---|
| Unwrought aluminum provided for in heading 7601; | ||
| Bars, rods and profiles provided for in heading 7604; wire provided for in heading 7605; | ||
| Plates, sheets and strip provided for in 7606; foil provided for in heading 7607; | ||
| Tubes, pipes and tube or pipe fittings provided for in heading 7608 and 7609; and | ||
| Castings and forgings of aluminum provided for in subheading 7616.99.51. |
Country exemptions
| Countries | Steel | Aluminum |
|---|---|---|
| United States | Exempt | Exempt |
| Canada, Mexico, and European Union Members* |
Exempt until 12:01am EDT, June 1, 2018 |
Exempt until 12:01am EDT, June 1, 2018 |
| Argentina, Australia, and Brazil | Exempt, until further notice | Exempt, until further notice |
| South Korea | Exempt, but subject to an annual absolute quota | Not exempt (only exempt prior to 12:01am EDT, May 1, 2018) |
| All other countries | Not exempt | Not exempt |
Absolute quota
As of May 24, 2018, only South Korean steel is subject to an absolute quota. On or after June 1, 2018, it is possible that additional countries will also have absolute quotas apply to their imports of steel or aluminum. Some important points to note about absolute quotas are as follows:
- Absolute quota strictly limits the quantity of goods that may enter the commerce of the United States for a specific period.
- The quota status is the standing which entitles quota-class merchandise to admission under an absolute quota.
- CBP maintains a weekly updated list of the quota status on their website.
- Importers must carefully review the current status of the allotted quota amount.
- Once the quote amount is filled, no additional importations are allowed into the U.S. for consumption.
- Quantities entered in excess of the quota must either be entered into a bonded warehoused or foreign trade zone (FTZ) to await a quota re-opening; be exported; or be destroyed under CBP supervision.
- For imports by truck or rail at the norther or southern borders:
- CBP will provide a conditional release of the merchandise, awaiting CBP Quota Headquarters release of a quota status indicator.
- This may cause issues, especially when a quota is near filling, as the goods may have already left the border and moved on toward destination.
- The goods must be held intact, until a quota status of ‘Quota Accepted’ is received. Thus, the goods may not enter into the commerce of the U.S. (i.e. be distributed), but be held in the condition received pending this status notification.
- If the quota is filled, a Quota Rejected message may be received. CBP will then ask for re-delivery so the goods may be exported or destroyed under CBP supervision, or be entered into a bonded warehouse or FTZ.
- CBP has an information page on quota enforcement and administration.
Exclusions
On March 19, 2018, the Department of Commerce (DOC), Bureau of Industry and Security (BIS) issued an interim final rule to amend the National Security Industrial Base Regulations on how individual importers may request exclusions from the tariffs and how other importers may file objections to the submitted exclusion requests. The BIS website provides the specific instructions on the filing of requests and objections for exclusions to the steel and aluminum duties.
All exclusion requests and objections to submitted exclusion requests must be in electronic form and submitted to the Federal Rulemaking Portal. At the Portal, search for Docket ID: BIS-2018-0002 for aluminum and BIS-2018-0006 for steel. Except for personally identifiable information, data submitted will be subject to public review, public inspection, and copying. For additional information see Livingston Trade News: Want To Be Excluded From Steel & Aluminum Tariffs? Here’s How.
The Commerce Department is reviewing product-specific exemption requests. Approvals may be part of the messaging to be promulgated before June 1, 2018.
On May 18, 2018 and May 21, 2018, U.S. Customs and Border Protection (CBP) issued Cargo Systems Messaging Service (CSMS) notices #18-000349 and #18-000352 respectively. The messages state that on June 1, 2018 there will be Automated Commercial Environment (ACE) functionality deployed to permit importers and filers to submit entries for any approved exclusions and therefore not pay the otherwise applicable Section 232 duties. Also, as of that date, refund requests may be made via Post Summary Correction (PSC) or protest for those approved exclusions dating back to the date the original request was posted for public comment.
CBP instructed that importers and filers should submit the product exclusion number based on the product exclusion docket number at Regulations.gov. The product exclusion number should be submitted in the Importer Additional Declaration Field (54 record) of the CBP and Trade Automated Interfaces Requirements (CATAIR) entry summary data, based on the following format:
- For excluded steel mill articles = STLXXXXXX
- For excluded aluminum articles = ALUXXXXXX
Note, “XXXXX” represents the last six digits of the Regulations.gov docket number; do not include spaces or special characters, such as hyphens.
Two additional Importer’s Additional Declaration Type Codes have been established:
02 = Product Exclusion Information – Steel products.
03 = Product Exclusion Information – Aluminum products
CBP further specifies the following:
- Only products from importer(s) designated in the product exclusion approved by the DOC are eligible for the exclusion from the Section 232 measures.
- Steel importers are reminded to submit mill certificates with their import data as required by 19 CFR 141.89.
- Do not submit the corresponding Chapter 99 HTS number for the Section 232 duties when the product exclusion number is submitted.
- Exclusions granted by DOC are retroactive on imports to the date the request for exclusion was posted for public comment at Regulations.gov.
- To request an administrative refund for previous imports of excluded products granted by DOC, importers may file a PSC and provide the product exclusion number in the Importer Additional Declaration Field.
- Once products are excluded from the Section 232 measures, importers may claim Generalized System of Preferences (GSP) or African Growth and Opportunity Act (AGOA) duty preferences on GSP and AGOA-eligible goods. If importers did not receive GSP or AGOA duty preferences on previous imports, and those imports are now covered by a retroactive exclusion, importers may request a refund of the duties subject to GSP or AGOA preferences through a PSC.
- If the entry has already liquidated, importers may protest the liquidation.
Importers should be prepared to provide documentary proof of any exclusion approvals upon request from CBP. To ensure approved exclusions are reflected on entries, it is recommended that importers provide their broker with the following data in advance and on the commercial invoice:
- Approved product part number/SKU
- Approved docket number
- Country of Origin
- Harmonized Tariff System number
- Effective date